Tuesday, July 26, 2011

A small handful of state public utility commissions (PUCs) have opened their own proceedings to review the AT&T/T-Mobile merger. This despite the fact that the U.S. Department of Justice and the FCC are conducting independent reviews of the proposed deal. While as a general matter, we contend that State Regulators Should Refrain from Reviewing Wireless Mergers, this month there have been some encouraging signs coming from some of the states in which PUC reviews have been opened.

The Arizona Corporation Commission, the state agency that oversees telecom providers, approved AT&T's acquisition of T-Mobile USA, the nation's fourth biggest wireless provider, without a hearing and with a minimal condition requiring the firm to notify T-Mobile customers by mail of the deal.

Next, TRDaily reported on July 13 that the West Virginia Public Service Commission's (WVPSC) legal and technical staff issued a recommendation that the WVPSC approve the AT&T-T-Mobile merger. Among other things, the WVPSC staff's recommendation pointed to T-Mobile's lack of substantial in-state presence as a factor for its conclusion.

Most recently, on July 25 TRDaily reported that the Louisiana Public Service Commission (LAPSC) staff issued a Report and Recommendation that the LAPSC approve the AT&T/T-Mobile merger. The LAPSC Staff Report and Recommendation is noteworthy for its recognition of the need to avoid unnecessary and duplicative merger reviews that should instead be undertaken at the federal level:

Sprint's comments are largely focused on the impact the merger will have on a national level, even stating, 'the national market is the relevant geographic scope on which to evaluate the proposed acquisition.' Sprint's comments also [contain] several references to the FCC, the DOJ, to federal jurisdictional issues, and to the proceedings that are ongoing before those agencies. Yet Sprint would presumably have the LPSC review those same issues, through a protracted proceeding not contemplated 301.M [ the LAPSC's streamlined rules for reviewing and approving telecommunications service providers mergers and acquisitions]. Staff is confident the FCC and DOJ, with their expansive resources and expertise on these matters, will perform a thorough review of Sprint[']s concerns regarding the impact this acquisition may have on a national level.

Rather than focus the Commission's resources on an unnecessary duplicative review, the Staff recommends the Commission zero in on the requirements of Section 301.M…

California's PUC would do well to take this point into consideration. With ongoing, overlapping reviews of AT&T/-T-Mobile by DOJ and the FCC, the merger will most certainly be scrutinized.